Executive Summary Book Reviews by Andrew Everett

Break From the Pack: How to Compete in a Copycat Economy

Break-from-the-pack companies are analogous to the small cluster of runners at the front of a marathon. The Copycat Economy is analogous to the majority of runners who lag behind. In the words of former IBM CEO Sam Palmisano, “Either you innovate or you’re in commodity hell. If you do what everybody else does, you have a low-margin business.”

Oren Harari explains, “To break from the pack, you must dominate some significant area of the market… Choose your battles very selectively… Don’t enter any space you’re not prepared to dominate.” He adds, “Domination is not necessarily about being the biggest… Neither is domination about beating up a rival… Apple might dominate design, but Dell dominates manufacturing and distribution efficiencies. There’s theoretically no limit to the number of dominant players in any industry, as long as they choose different spaces to lead and those spaces matter to customers.”

The author writes about “a highly disciplined level of curiosity, coolness, and craziness.” To do achieve this, your company should “become a magnet for the crazy three percent” of customers, employees, and partners.

Harari defines the Madonna Effect as not having to change, but doing it anyway. Business leaders can learn from the success of the superstar. By reinventing herself at the top of her game, she made her “product” obsolete before the market did.

He has a lot to say about mergers and acquisitions. He points to studies from McKinsey, Barron’s, and BusinessWeek which document that most large deals fail to realize positive results. “By definition, sustainable, break-from-the-pack competitive advantage can occur only when the core of the innovative products and customer loyalty comes organically. The value of carefully planned small acquisitions is to fan organic flames in very specific directions.”

“In a Copycat Economy, hype will not sustain a brand… Equate branding with consistency, reliability, and integrity of the extraordinary things you will provide and do on behalf of your customers.”

Harari thinks management often focuses of the wrong metrics. “The size of market share, top-line revenue, and balance sheet is no predictor of dominance… In the absence of profit metrics, all the other measures mask performance problems.” Instead, Harari focuses on measures profitability, organic growth, customer retention, and retention of top talent. “Paradoxically, the more that leaders focus on investors as opposed to customers, the more likely the returns to investors will suffer.”

Oren Harari was a professor of business at the University of San Francisco, a consultant with the Tom Peters Group, and a columnist for Management Review. Break From the Pack was his eighth and last book. He died of brain cancer in 2010.

Harari, Oren. Break from the Pack: How to Compete in a Copycat Economy. Upper Saddle River, New Jersey: Financial Times Press, 2007. Buy from Amazon.com